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Murray council denies request for more Utopia funds

Published February 19, 2013 8:29 pm

Technology • Additional money would be used for operating expenses.
This is an archived article that was published on sltrib.com in 2013, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

Murray • City Council members on Tuesday rejected a request to appropriate $168,800 in additional funding for the financially troubled UTOPIA fiber-optic network.

The money would have been used for operating expenses for UTOPIA (the Utah Telecommunications Open Infrastructure Agency), a consortium of 11 municipalities that is building the high-speed network.

The 4 to 1 vote followed a public hearing in which a dozen speakers opposed giving UTOPIA any more money. Councilman Darren Stam voted to appropriate the money, saying providing the funding would be less expensive in the long run than other options, which include pulling the plug entirely and allowing the project to "go dark."

Opponents at the meeting said enough is enough. Pam Squires described UTOPIA as a "money pit" from the start, whileMike Adams said the agency's business models aren't working.

Keith Bateman said the project was ill-conceived.

"UTOPIA will never succeed," he said. "Murray City needs to get out of it any way it can."

Murray is among the 11 member cities that joined UTOPIA a decade ago; the group committed to $185 million in bond debt that stretches through 2040. The economic downturn, coupled with missteps, led Murray and seven other member cities to form the Utah Infrastructure Agency (UIA) in 2010 to approve an additional $60 million in bonds to rescue the floundering project.

Murray has already paid out $3.6 million for its share and remains on the hook for $58.6 million. The city's fiber-optic lines are 64 percent built out, and about 22 percent of residents and 10 percent of businesses who could attach to the lines have done so. Only about 10,000 subscribers among all member cities have connected to the network, which has had nine consecutive years of operating losses.

UTOPIA has drawn criticism from Utah lawmakers, who are considering a bill that would make it impossible for the network to use money from the future sale of bonds to fund its day-to-day operations. SB172 would prohibit cities and counties from selling bonds after May 14 to build projects and then use any of that money to operate them more than one year after the debt was issued.

pmanson@sltrib.com

Twitter: @PamelaMansonSLC